Sunday, 26 February 2017

5 Lies the World Tells Entrepreneurs About How to Succeed

Hard work and persistence are not enough -- true success hinges on another factor (and it's not luck).

It's common knowledge that 90 percent of startups die. So what do the 10 percent have that the 90 percent don’t?

We are taught that succeeding as an entrepreneur is all about working ridiculously harder than anyone else and persisting beyond the challenges. Then, and only then, will you “make it.” That is a big bunch of hooey.

I believe there is one factor above the others that allows for great success: brutal honesty. Unfortunately, we are fed lies in the form of inspirational quotes and fairytale stories about entrepreneurship, which tempt us not to engage in brutal honesty.

What is brutal honesty? Brutal honesty is about being excruciatingly self-aware so that you can hear the real feedback the market is telling you, and correct course before it is too late. This is the true test of entrepreneurship, since tearing down the walls you built with your blood, sweat, tears (and limited funds) is not for the faint of heart.

Here are the top five lies they feed you as an entrepreneur and how to combat them with the right mindset:

1. Listen to the data.

Whether it is Eric Reis’ Lean Startup or the countless other modern entrepreneurial books on agile/lean approaches to building businesses, the emphasis on data can be dangerous. Many entrepreneurs interpret this as logging into your Google Analytics or Mixpanel dashboards, often ignoring underlying assumptions and often simply reinforcing your existing beliefs (i.e. confirmation bias, or reading into data to prove out what you already believe). While data is essential, the data that is most important is the one spit out by your brain, not by the computer. The data on the screen is full of shoddy underlying assumptions. The only way to be brutally honest is to take this digital data and force yourself to create real-world, self-critical human conclusions about what the data means. Without that, you will agile or lean yourself out of existence.

2. Follow your dreams.

Am I really going to argue with this? Yes, I am. I completely agree that one must follow their dreams, no matter how crazy and unrealistic they may be, but it is absolutely critical to your success to make an important distinction about which aspect of the dream you will follow. This is the part that takes brutal honesty. In my experience, success tends to follow entrepreneurs who have a wild idea that they want to make happen, but they remain totally open to the specific paths they will take to get to that destination. The difference is “I want to change this industry” vs. “I want to change this industry but it must start with this thing.” Being too specific about the path too early on could be your downfall.

3. Market it and they will come.

Many early-stage entrepreneurs try to bulldoze their market with jazzy marketing. This cannot work without brutal honesty. Honesty is about perpetually asking your audience about why they need you and not simply investing money in marketing and believing that your market “will come around.” I’ve seen too many companies run out of capital pouring money into marketing tactics without first listening to their audience. This doesn’t mean that you aren’t being patient with marketing tactics. It just means that you are listening intently to “micro-reactions” from your audience so you can adjustments and optimize for the limited capital you have.

4. Do tons of market research by talking to your potential customers.

This is another myth that you are constantly fed by the entrepreneurial expert community. The brutally honest truth is that conducting traditional market research with surveys, focus groups and open-ended conversations, while being helpful in some ways, could actually mislead you to build a business on top of a weak foundation. The reality is that market research requires the power of context. To succeed, you need the brutal truth from your market and the only way to get the real feedback is by trying to pitch a product while asking your audience to pay for it. Only when the product feels real to your audience, will you get the critical feedback you need to succeed. Even if you’re not sure what the product is going to be, you’ve got to “make it real” as early as you can and ask people to pay for it.

5. Luck is a myth.

Also known as “I make my own luck” or “The harder I work, the luckier I get.” All of these statements are false. The concept of luck does exist, but the real word for it is timing. Timing determines if the right door opens exactly when you need it, or the key person walks into your life or if your product resonates with your customer given all the other factors in the world at that time. And despite our best attempts, most often, timing is outside of our direct control. The only thing we can do is to stay alive long enough, with the broad delirious vision of where we want to go, and open tactical plan, and attempt to increase our timing-based probabilities. It is true that “the harder you work, the luckier you get,” but that is because with hard work, you are increasing the probability that your efforts will intersect with opportunity at exactly the right time. It takes brutal honesty to separate mystical notions like “luck” and call it out for what it really is -- the spontaneous intersection of your efforts with the right moments in time.

These are some common myths I’ve come across in popular entrepreneurial and motivational ideology. The core solve for these myths is perpetual commitment to brutal honesty. It is the hardest thing you have to do as an entrepreneur. For example, maybe you’ve spent millions to build a product and now your honest ears are telling you the real market feedback, that you need to rip down all your efforts, and rebuild it (again). Now, will you do this hardest of all hard things -- or will you keep putting money and time into your current product simply hoping that hard work and persistence will change the tide?